UK growth in EV sales driven by businesses, figures suggest

A car industry body has called on the government to support uptake among private buyers.

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James Fossdyke

By: James Fossdyke

Mar 29, 2021 at 3:00am ET

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Two-thirds of all new electric cars bought in the UK are purchased by businesses, rather than private buyers, according to a leading industry body. The Society of Motor Manufacturers and Traders (SMMT), which records ‘official’ figures on new car sales and production, says the growth in the electric car market is being driven by the corporate sector.

According to the SMMT data, sales of electric cars rocketed in 2020, with the market up 185.9 percent compared with 2019. In total, more than 108,000 new electric cars were registered, giving the technology a total market share of 6.6 percent.

But the picture looks different when you split those sales between private consumers, who registered 34,324 electric cars in 2020, and companies, which registered 73,881 new electric cars. And battery-electric cars made up 4.6 percent of all new cars sold to private buyers last year, whereas they accounted for almost nine percent of corporate registrations.

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Of course, the corporate sector has always made up a large proportion of new car sales, and these figures may not come as a great shock to industry insiders. In total, so-called ‘fleet’ sales made up 53 percent of all new car registrations last year, while private customers accounted for just 44 percent of the market.

And when it comes to electric cars, it’s companies and company car drivers that get the lion’s share of incentives. Tax rates have been cut, so electric cars now only incur Benefit-in-Kind (BiK) tax at one percent for the 2021/22 financial year. And in 2020/21, drivers didn’t have to pay a penny in company car tax.

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However, both private and corporate customers will have felt the impact of changes to the government’s Plug-In Car Grant, which was slashed for cars costing £35,000 or more. The grant was also reduced, so eligible cars only saw their prices cut by £2,500, rather than the earlier £3,000.

Now, the SMMT says more must be done to help consumers into electric vehicles – particularly in light of the government’s plan to ban the sale of new petrol and diesel cars from 2030. The organisation says consumer acceptance of the technology is still low because of “concerns over affordability, charge point availability and infrastructure reliability”.

Volkswagen ID.3 at a bp pulse charging station

And the SMMT claims encouraging customers to make the switch will require more than just a few financial incentives; it also wants to see accelerated growth in electric vehicle charging infrastructure. In fact, the trade body says its estimates suggest the UK will need around 2.3 million public charge points in service by 2030 to provide “adequate coverage”. To achieve that figure, the country will need to install more than 700 charge points a day until the end of the decade. At the moment, the UK is installing around 42 chargers a day.

More on government support for electric vehicles:

Government to spend £20 million funding 'electric vehicle innovations'

UK government's electric car grants effectiveness in doubt by new report

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“While last year’s bumper uptake of electric vehicles is to be welcomed, it’s clear this has been an electric revolution primarily for fleets, not families,” said SMMT chief executive Mike Hawes. “Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.

“To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning. We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location.”

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